Residential Property Insurance

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What is Residential Property Insurance?

Investing in properties for development and for the buy-to-let market is popular in the UK. Residential property insurance is designed specifically for residential landlords or buy-to-let owners, including businesses involved in property management and development.

Residential property insurance will provide protection against all kinds of risks including natural disasters such as flood and fire, in the event of theft or vandalism to your property or against accidents such as burst pipes.

If you let your property to tenants, it is worth bearing in mind that a standard home insurance policy is not normally adequate. You may find that you may be unsuccessful if you need to make a claim.

Residential property insurance can be used to cover the following types of risks:

Commercial and Private Lets
Individual flats or Blocks of Flats
Holiday Lets
Legal Expenses
Rent Guarantee
Contents and BuildingsCover
Glass Replacement Cover

Some insurers may not offer cover for lets to students, bedsits or DSS tenants. Others may be willing to accommodate this but possibly at a higher premium.

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Why is Residential Property Insurance Required?

Residential Property Insurance is essential because your homeowner’s insurance or your personal house and contents policy does not provide cover any aspect relating to your buy-to-let business or your business as a landlord or property developer.

If, for example, a fire occurs and you lose your property, you want a policy that will financially compensate you for the cost of rebuilding from scratch. While the property is being rebuilt, ideally you also want to be reimbursed for the loss of income you have to endure while not being able to rent out your property.

Other considerations in the event of such a disaster would include covering the cost of alternative accommodation for your tenants and covering the costs of your contents including furniture you own in the property.

It is also beneficial to consider public and property owners’ liability to give you protection just in case anyone is harmed or injured in the property.

Understand that home insurance is specific to the home, not any of your other properties which you use as part of your business. Your home insurance could be voided if you try to make a claim and the insurer involved finds out that you have in fact failed to declare that you have a property development or buy-to-let business.

What does Residential Property Insurance cover?

There are so many insurers available which offer different types of cover and varying levels of service. Some are part of major banks while others operate in a specialist way online. Most can tailor a policy to meet your specific requirements. Consider the following main elements when looking to buy a residential property insurance:

Contents and Building Cover will give you buildings insurance as well as cover you for any property damage. The value will vary depending on the type of property you own. When negotiating contents insurance, think about the contents you may have in, for example, shared or communal areas of your property. This is especially relevant in blocks of flats. It is a good idea to have ready an inventory of your contents. This will facilitate matters should you ever need to so make a claim.

Public Liability to cover injury to your tenants or visitors to your rented property and even members of the public who may have accidents or be hurt while on your property.

Property Owner’s Liability will come in useful if you need to replace or repair expensive equipment, such as electrical appliances, or if items are stolen from your rented property such as computers or televisions.

Employer’s Liability cover will protect you as an employer against any actions taken against you by a member of your staff or any accidents which may befall your staff.

Considerations before buying Residential Property Insurance

Research the market and get a few quotes from reputable insurance companies which offer residential property insurance.

Make a thorough comparison of all the quotes you have received.

It is not always wise to simply opt for the least expensive quote. Instead, decide on a policy that gives you overall good cover. Choose an insurer who is helpful and understands your business in property development and management.

Before signing any legal contract, read all terms and conditions meticulously and make sure you understand all the issues concerned.

Buying the right Residential Property Insurance is vital, especially if you have a portfolio of properties which you rent out to tenants. The cost of not having this type of cover could prove extremely expensive.